A method of determining the capital cost of process plant and equipment. There are four recognized ways this is done:
1. Rules of thumb provide approximations to the order of magnitude of cost. They are useful as a rough guide but are prone to major error.
2. The use of cost curves provide estimates based on similar process plants or equipment, and may involve scale-up factors.
3. Multiplication factors can be applied to different types of equipment, such as heat exchangers and pumps etc., that might be involved in a process.
4. Definitive estimates require the use of detailed materials and equipment, the direct and indirect costs. Although time-consuming due to the level of detail involved, it is the most accurate method.